Correlation Between AB Electrolux and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both AB Electrolux and G5 Entertainment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AB Electrolux and G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Electrolux and G5 Entertainment publ, you can compare the effects of market volatilities on AB Electrolux and G5 Entertainment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AB Electrolux with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Electrolux and G5 Entertainment.
Diversification Opportunities for AB Electrolux and G5 Entertainment
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ELUX-A and G5EN is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AB Electrolux and G5 Entertainment publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment publ and AB Electrolux is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AB Electrolux are associated (or correlated) with G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment publ has no effect on the direction of AB Electrolux i.e., AB Electrolux and G5 Entertainment go up and down completely randomly.
Pair Corralation between AB Electrolux and G5 Entertainment
Assuming the 90 days trading horizon AB Electrolux is expected to generate 1.35 times more return on investment than G5 Entertainment. However, AB Electrolux is 1.35 times more volatile than G5 Entertainment publ. It trades about -0.03 of its potential returns per unit of risk. G5 Entertainment publ is currently generating about -0.05 per unit of risk. If you would invest 18,070 in AB Electrolux on August 24, 2024 and sell it today you would lose (8,470) from holding AB Electrolux or give up 46.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Electrolux vs. G5 Entertainment publ
Performance |
| Timeline |
| AB Electrolux |
| G5 Entertainment publ |
AB Electrolux and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Electrolux and G5 Entertainment
The main advantage of trading using opposite AB Electrolux and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Electrolux position performs unexpectedly, G5 Entertainment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.| AB Electrolux vs. Precise Biometrics AB | AB Electrolux vs. Anoto Group AB | AB Electrolux vs. Bong AB | AB Electrolux vs. Episurf Medical AB |
| G5 Entertainment vs. Stillfront Group AB | G5 Entertainment vs. Paradox Interactive AB | G5 Entertainment vs. Catena Media plc | G5 Entertainment vs. Betsson AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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